At present rate of earnings, market may price down AREIT for a satisfactory dividend yield

On November 3, 2020 AREIT, Inc. reported its 3Q20 financial results. For the months ending September 30, 2020 generated an earnings per share of 0.82.  That earnings if annualized would yield an annual earnings per share of 1.0933.

According to the Philippine REIT law at least 90% of earnings of a REIT entity should be distributed as dividend. Ninety percent of 1.0933 earnings per share would be 0.984.  That would mean 0.984 a share would be the minimum distributable as dividend.  

At the current share price of AREIT the 0.984 dividend distribution would translate to a dividend yield of just 3.84%.  On November 30, 2020 AREIT closed at 25.60 a share.

There is risk that the market may demand a higher yield of around 5 to 6% from AREIT.  In that case the market may price AREIT down to get the desired dividend yield.

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Disclaimer and Disclosure: This is an independent analysis for discussion purposes with the aim of giving stock traders and investors an independent viewpoint.  Accuretti Systems Inc. in day-to-day trading may have owned, or is considering buying or disposing, the shares of the companies mentioned in this commentary.

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